Popular Social Security Myths Busted

Popular Social Security Myths Busted


The Social Security Administration will guide you through the process

Most Social Security Administration (SSA) workers will do their best to help you file for benefits, but they are ill equipped in showing you the most advantageous way to file. That decision can be very complicated as there is no 'one-size-fits-all' solution. Many people inside the SSA do not understand their own rules nor the many benefit strategies available to filers based on their personal situations. They often give people incomplete or wrong advice. At Aegis Financial, we specialize in helping individuals and couples craft a Social Security plan based on your goals and objectives.

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You should enroll in Social Security as soon as you’re eligible

Have you ever been told to file for social security as early as possible in order to maximize your benefits? You can start receiving retirement benefits as early as age 62, but doing so can be a big mistake. Filing prior to 'Full Retirement Age' (FRA) can reduce your benefit by up to 25% whereas waiting to file until age 70 will increase your benefit to 132% of you FRA benefit. As an example, a worker retiring this year at full retirement age would be eligible for a maximum monthly benefit of $2,663 – while a 62-year-old taking benefits this year would only receive $1,997 per month.

Every year you delay benefits past FRA(typically age 66) up until age 70, you are guaranteed an 8% increase in your benefits from SSA. That’s a guaranteed return you’re not likely to find anywhere else in todays market. On average, a man reaching age 65 today can expect to live until 84, according to the Social Security Administration, while one in every four 65-year-olds will live past age 90. Waiting until age 70 to take benefits, however, is not right for everyone. Financial condition, medical and family health history all play a significant role in determining the best strategy for your situation.


You can’t get Social Security if you haven’t worked outside the home

Regardless of whether you have paid into the Social Security system, you are still eligible for benefits equal to half your spouse’s benefits. You are also eligible for spousal benefits even if you’re currently divorced, as long as you were married for 10 years and haven’t remarried.


Your Social Security check is not taxable

We work and pay taxes our whole lives and still can't escape Uncle Sam. If your 'Provisional Income' is above $34,000 (if you file taxes individually) or $44,000 if you are married and filing jointly, you’ll owe taxes on 85 percent of your social security benefits. Provisional income includes half of social security benefits, AGI and income any tax-exempt interest like municipal bonds. There are also a handful of states that impose a tax on Social Security benefits.


Social Security will fully fund your retirement

Social Security was always meant to supplement Americans’ retirement income – and even at current levels it’s not nearly enough to sustain a pre-retirement lifestyle. The average monthly benefit in January was about $1,360, amounting to just over $16,000 annually. On average, Social Security provides approximately 38% of pre-retirement income. That’s just higher than the poverty level of about $12,000 per year. Utilizing proper filing strategies, you may be able significantly increase your lifetime benefits.


There won’t be any Social Security money left by the time millennials retire

In 1960, there were over two hundred workers paying into social security for every one person receiving benefits. Today that ratio is 2:1 and 10,000 baby boomers are entering retirement every day and expected to do so through the year 2030. Given the funding problems with Social Security, it’s easy for workers, especially younger millennials, to write off the system entirely. Most experts agree, however, that Social Security system will remain intact......changed as politicians like to do, but intact.